13 Case Problem with Sample Answer



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13–7. Case Problem with Sample Answer

Millennium Club, Inc., operates a tavern in South Bend, Indiana. In January 2003, Pamela Avila and other minors gained admission by misrepresenting themselves to be at least twenty-one years old. According to the Club’s representatives, the minors used false driver’s licenses, “fraudulent transfer of a stamp used to gain admission by another patron or other means of false identification.” To gain access, the minors also signed affidavits falsely attesting to the fact that they were age twenty-one or older. When the state filed criminal charges against the Club, the Club filed a suit in an Indiana state court against Avila and more than two hundred others, seeking damages of $3,000 each for misrepresenting their ages. The minors filed a motion to dismiss the complaint. Should the court grant the motion? What are the competing policy interests in this case? If the Club was not careful in checking minors’ identification, should it be allowed to recover? If the Club reasonably relied on the minors’ representations, should the minors be allowed to avoid liability? Discuss. [Millennium Club, Inc. v. Avila, 809 N.E.2d 906 (Ind.App. 2004)]


13–7. Answer

The Club grounded its action against the minors on the tort of fraud, not a breach of contract. The court granted the motion to dismiss, and the Club appealed to a state in­termediate appellate court, which reversed the lower court’s decision and remanded the case for trial. The minors argued in part that allowing the Club to recover in this case would discourage tavern owners from being careful when checking their customers’ identification, undermining the state’s efforts to place responsibility on the owners to prevent minors from entering taverns. The appellate court acknowledged, “It is a gen­eral rule of public policy that a person cannot maintain an action if, in order to establish his cause of action, he must rely, in whole or in part, on an illegal or immoral act or transaction to which he is a party. . . . [T]hose who knowingly and intentionally engage in serious illegal acts should not be able to impose liability upon others for the conse­quences of their own behavior.” The court also recognized, however, “Minors should be held accountable for their actions. The Minors here used fraudulent identifications and written statements regarding their age to induce and encourage the Club to allow them access to the tavern. . . . [D]espite best efforts to prevent minors from entering a tavern, advances in technology have allowed the production of realistic false identifications. If the evidence presented to the [trial] court demonstrates that the Club allowed the Mi­nors access in reasonable reliance upon the fraudulent identifications and written statements and the Club did not participate in an illegal transaction, then public policy should not prevent the ultimate cost from being borne by the Minors who set this situa­tion into motion.”


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